The Baucus Bill passed out of the Senate Finance Committee with one Republican vote (Olympia Snowe of Maine). Or at least an outline of the bill passed. We don't yet have legislative language. But it is clear that the Democrats are really intent on passing some kind of legislation. This is surely a temporary win for the reform side, but it raises more questions than it answers.

But the evil insurance companies, which up to now have been playing ball with the reform forces, have finally shown their color. The American Health Insurance Providers issued a report that projects rising insurance premiums for a lot of American voters. Of course they are evil, and, to be sure, motivated by interest. But the logic of the report is hard to escape.

If you are going to extend coverage to a lot of people who can't pay for it now, the money has to come from somewhere. One place a lot of cash was supposed to come from was young workers and others who can afford some insurance but choose not to purchase it. The bill had included a pretty severe set of sanctions to force them to open their wallets, and that would have been a source of revenue for private insurers. But the sanctions have been weakened to the point of ineffectiveness. Since the bill would also prohibit denying coverage to people with pre-existing illnesses, it will make sense for the recalcitrant uninsured to pay the modest penalties and keep on being uninsured. After all, if they do get sick they can pick up coverage then.

All this means that private insurers will have to cover a lot of new people with little if any new revenue. I'm no economist, but I think that means that premium costs will have to rise significantly. Of course a public option might take care of this, but that means the costs will be borne by public, and the price of the legislation will balloon. Houston, we have a problem.

Politically speaking, we now see two powerful forces arrayed against the Baucus plan. One is the insurance industry, and the other is the labor unions. They don't want their extremely generous healthcare packages, painstakingly negotiated, to be punitively taxed, as would happen under the Baucus plan.

It seems to me that a little momentum for reform has been generated, but that nothing much has been settled.